As the year draws to a close, holidays begin marching past in quick succession. These festivities present almost endless chances to open your wallet. Christmas is a weeks-long spending affair in many places in December. Thanksgiving, Chanukah, New Year’s Eve and the Lunar New Year bookend the holiday season with often costly celebrations around the world.
Travel, parties, presents and home decoration are just a few of the myriad expenses we face, or risk coming across as stingy or miserable.
When there is shopping, there is the opportunity to go overboard and spend too much. Nearly half of American shoppers who prepare a holiday budget sail right through it, according to a Consumer Reports survey. And 37 percent of shoppers in the UK borrowed money during the Christmas season, according to a survey from UK Financial Solutions.Last year in Australia, about half of people planned to use a credit card to pay for holiday gifts, and a third felt pressured to spend more than they could really afford, according to Australian rate comparison company RateCity. And holiday revelers in the Ukraine and Russia plan to spend more this year — 17.4 percent more and 13.1 percent more, respectively — than they spent last year, much of it on gifts, according to Deloitte’s year-end spending survey.
But it is not too late to put on the brakes — or to plan strategically. Here are some pointers:
What it will take: Christmas, while not celebrated universally, can provide an example of how much money families spend on a single holiday. Australians expect to spend about $993 ($930 US) each over the holiday, including gifts, travel, entertaining, and extra food and drink, according to Australia’s Commonwealth Bank. Americans estimate they will spend $704 on Christmas gifts alone, according to a Gallup poll. In the UK, households are projected to spend an average of £835 ($1,345 US) celebrating Christmas. Even if Christmas is not your thing, many people use the time off to get away. In France, “some go skiing, and a lucky few travel overseas for warmer climates, such as Martinique and Guadalupe,” said Victoria Lewis, a financial advisor with Spectrum IFA in Paris.
How long you need to prepare: Preparing for end-of-year holiday spending should start in November, at the latest. “The first thing to do is write down every additional cost that is going to be associated with this time of year,” said Jeanette Pavini, a savings expert with US site Coupons.com. That includes the cost to wrap and post gifts, host any dinners or parties, mail cards, travel to your in-laws’ house and bake for friends and neighbours. For a starting point, add up what you spent last year. (And ask yourself whether you spent too much.) Can you afford it this year? If not, decide where to cut back. If you are credit card debt free, it is acceptable to consider charging any amount that you can pay back when the bill comes in January. “If you cannot pay your credit card by the time you get the statement, avoid charging things,” Pavini said. “The interest is just going to add up and it is not worth it.”
Do it now: Start shopping the sales. Make a list of all the non-perishable items needed for entertaining and cooking, and look out for special deals at your local stores. “Get on your favorite manufacturer or grocery store’s social media site, so you are aware ahead of time what is going to be on sale,” Pavini said. “You can save up to 40 percent.”
Buy in bulk. Get a couple of cases of your favorite wine and most retailers will give you a discount on the batch — plus you will have an extra gift at the ready all season. You can also buy a giant gift basket and then split its contents among family members or hosts.
Take advantage of price adjustments. Many retailers will refund you the difference if an item you buy drops in price within 14 days of your purchase. “Save your receipts,” Pavini said. “I have saved thousands of dollars over the years by doing this.”
Shop online. There are many advantages to skipping the bricks-and-mortar shop, including the ability to compare prices and the chance to have your present posted directly. It also keeps you away from a retailer’s eye-catching displays in the store, which can lure you into spending more than you planned. Search for coupon codes on sites like the US’s RetailMeNot.com, the UK’s VoucherCodes.co.uk or Australia’s AUCouponCodes.com.au. Consider shopping through websites such as Quidco.com or Topcashback.co.uk, which offer cash back when you click through their site to certain retailers. Just be careful if you are using a credit card — it is easy to overspend.
Get your tickets. Planning a getaway? Buy tickets as soon as possible. The best time: Tuesdays. “It is historically the best day to book your travel for the best rate,” Pavini said. “Airlines come out with their low fares for the week in the morning, and by 4:30 Eastern Time it has leveled out and you will get the best fares.”
Do it later: Shop with cash. Once you have determined how much you can spend on each category, take out the cash and put it into envelopes. “It is unbelievable how much money people save,” Pavini said. “When you are about to grab that stocking stuffer item you will rethink it. Cash makes you much more conscious of what you are spending.” If you cannot shop with cash, consider using a debit card instead of a credit card, and track purchases daily using a site such as Mint.com.
Buy after Christmas. Are you seeing any family after the holidays? Purchase their presents at post-Christmas sales. You can also use post-holiday specials to stock up on wrapping paper, ribbon, and cards for next year.
Do it smarter: Start saving on Boxing Day. (The first weekday after Christmas in many countries.) “The longer the time frame you give yourself to save, the easier it is,” said Brett Evans, executive director of Atlas Wealth Management in Southport, Australia. “Unfortunately, people usually catch on in August or September and by then they only have four months instead of 12.” Take willpower out of the equation by having a reasonable amount automatically transferred to a savings account every payday.
Set windfalls aside. Getting a tax refund? Or a lump sum of cash elsewhere? “If you are lucky enough to receive a bonus — typically payable in March or April in Europe — put it aside for your holiday costs,” Lewis said.
This article originally appeared in a interview with BBC Capital.